Holiday Sales Update #1 - So far, so good!

We hope you are having a terrific fall. It is that time of year again when we share weekly highlights with what we are hearing and seeing in specialty retail. We hope you find this update helpful, and as always, we would love to hear from you.

SALES UPDATE

After a good first half, mixed results in late summer/early fall (likely due to natural disasters and warm weather) left us a little cautious on holiday demand, but we are happy to report that the large majority of you are reporting a positive start to the holiday season. This includes our large multi-channel home and apparel clients, established online retailers, traditional catalogers, and our fastest growing category- emerging brands. We monitor active DTC buyer file counts for more than 200 brands, and we see a range of categories and price points showing YOY file growth. The only exception when we look at those brands struggling to LY are smaller, mature businesses who perhaps are challenged with competing in this new world of vast scale, promotions, and free shipping. Here are a few key call-outs:

Several industry sources from the NRF to Gallup are predicting 3-4% increases in retail sales and consumer spending. UPS is forecasting a 5% increase in shipping volume. Only 27% of consumers say their spending will be impacted by economic concerns, down from 32% LY (Source: NRF).

According to the NRF, 57% of consumers will shop at a department store and 54% at a discount store. For the eleventh year in a row, gift cards remain the most popular items on wish lists.

Overall, fourth quarter retail demand is declining in importance for retail, now at 28.9% (Source: Annual Retail Trade Survey). Black Friday is also losing some relevance as the season spreads out; in 2016, there were 15% fewer BF shoppers than the year before (Source: Cardlytics). On the flip side, the “last minute shopper” segment is growing 8% YOY and accounts for 28% of all holiday spending.

According to the Salesforce Holiday Insights Hub, between Thanksgiving and Cyber Monday, 86% of orders will ship free with an average discount of 28%. Also, 61% of traffic and 37% of orders will be on mobile.

Lastly, it feels like Facebook should have their own section. With over 2B monthly active users (a 16% increase to LY), mobile advertising was a whopping 88% of their Q3 ad earnings. FB is also in the news for leading competitors in last-click social commerce. 47.7& of consumers report making a purchase from an ad they saw on FB (Source: Open Influence). Instagram was a distant 8.6%.

PROMOTIONS UPDATE

Last year we talked about the early start to promotions. It’s hard to say promotions are even earlier this year, when it feels like the landscape has been very promotional all year. A few call-outs:

Don’t forget that your affluent target customer is still shopping big box, mainstream retailers- and Amazon of course. Here is what she’s seeing:

Kohl’s launched their holiday promotions Nov. 1st and said their Black Friday promotions would be available the Monday before Thanksgiving.

Sears has already kicked off 10-50% discounts and Kmart 10-40%.

Amazon launched their Black Friday deals last week and some toys are already marked down 30%.

She Is also seeing offers from your specialty retail peers. A few notable offers from late October:

Banana Republic- 50% off Friends and Family

Neiman Marcus- 30% of Shopping Spree

Talbots- 30% off

World Market- 40% off Furniture and Free Shipping

Pottery Barn- 25% off

The Children’s Place- 40-60% Off

The Limited- 40% off

IN MY MAILBOX

Last year I had 75 catalogs and direct mail pieces in my mailbox the first week of November, not including election materials, compared to 72 this year. It should be noted, however, the week before I had over 40 catalogs/direct mail pieces as we continue to see clients adding contacts and ramping up earlier in the season. As of this Q4 we have launched over 70 online retailers, traditional retailers, wholesalers, and emerging brands successfully into DM, and based on 2018 forecasts, the trend continues. Here are a few key call-outs from my mailbox this week:

Apparel dominated with 30 pieces, mostly full trim size catalogs. All the usual suspects. A special call-out to Todd Snyder, Samuel Hubbard, and JMcLaughlin for their outstanding creative. Notably, these brands also fall into the non-promo group, along with Garnet Hill, Warby Parker, Andrew Marc, Soft Surroundings, and Wrap. (Though some of these brands are promotional online.)

I was surprised to see only 11 Home pieces, which seems lite for this time of year, but over 20 when you include the prior week. A special call-out to Pottery Barn Teen for their product partnerships with Star Wars and Harry Potter.

The food/gift category was comparable to LY with 10 pieces. Mostly full trim size catalogs. Interesting to note this was the most full-price group. No new players from previous years, though again a special creative call-out to Bounty Hunter for their awesome cover.

The children’s category also seemed lite with 7 pieces, 4 toy and 3 apparel. The traditional children’s catalogers have been hurt the most over the years by the dominance and growth of online retailers, including Target and Walmart alongside Amazon.

Lastly, I had 14 pieces in the Misc category, mostly small formats from a range of categories and non-profits.

A special note to say we are truly excited about the advances in data and technology that will allow us to integrate (and personalize) marketing across channels. More to come! Again, we hope you find this update helpful, and we hope you have a terrific holiday season (personally + professionally).